The proper functioning of the adult vertebrate central nervous system (CNS) depends critically on the generation of specific neuronal and glial cell types at the correct times and positions during embryogenesis. This process is largely controlled by interactions between secreted signaling proteins that provide spatial and temporal cues and the transcription factors that transduce these signals to effect cell type-specific genetic programs. In the developing CNS, graded Sonic hedgehog (Shh) signaling, acting through the 3 Gli transcription factors, controls cell fate specification in the neural tube by regulating the expression of specific sets of genes in dividing neuronal and glial progenitor cells. Current data supports a model where the 3 Gli proteins transduce graded Shh signaling by producing a "Gli activity gradient". However, it is becoming increasingly clear that this pathway cannot fully account for the complex dynamic and spatial development of cells in this structure. Recently we have found that the proper establishment of distinct ventral neuronal progenitor domains involves the transcriptional integration of "canonical" Shh-Gli and Wnt-Tcf signaling elements. These results, taken with our preliminary data showing that additional Shh-Gli target genes can also be regulated by Tcf proteins, and work published elsewhere, suggests that transcriptional cross-talk between the Shh-Gli and Wnt-Tcf pathways is likely to be a common mechanism for controlling tissue patterning and cell fate specification. This proposal will examine the molecular mechanisms that regulate this interaction in specific CNS lineages, using the developing vertebrate spinal cord as a model system. The experiments in Aim 1 will address the requirement for Tcf4, a key transcriptional regulator of canonical Wnt signaling, in neural development by examining targeted Tcf4 mouse mutants and by using genetic lineage tracing and target gene enhancer analysis approaches to address its role in regulating the expression of cell fate determinant genes that are also controlled by Shh-Gli signaling. In Aim 2, we will employ sensitive in vivo luciferase assays using identified Shh-Gli target gene enhancer elements to study the dynamic aspects of the transcriptional integration of Shh-Gli and Wnt-Tcf signaling in spinal cord cells. This approach allows both graded concentration and temporal effects to be evaluated under conditions of altered activator and/or repressor activity. In Aim 3, we will test the idea that positive Wnt/b-catenin/Tcf signaling controls the development of a subset of oligodendrocytes by regulating the expression of an important factor, Nkx2.2, which is also a target of Shh-Gli signaling. These experiments are united by the hypothesis that both negative and positive Wnt signaling inputs regulate Shh-Gli target gene expression at different times and in distinct CNS lineages. Hedgehog-Gli signaling is widely recognized as playing a critical role in both development and in an ever increasing number of human diseases. A common theme in most cases is that the pathway becomes deregulated, i.e., pathway activation becomes uncoupled from the many levels of control that normally restrict the responses to the appropriate times and tissues. This is thought to lead to the inappropriate up-regulation of target genes whose constitutive activities initiate or contribute to abnormal growth (e.g., cancerous tumors) or patterning (e.g., holoprosencephaly). Similarly, abnormalities in Wnt signaling are also known to be involved in many human disorders, and the proper control over these signals is equally critical for normal development and adult function. The possibility that transcriptional regulators of the Shh-Gli and Wnt-Tcf pathways may converge to control a specific set of shared target genes has important clinical and diagnostic implications. By elucidating the transcriptional mechanisms regulating the expression of shared target genes in the CNS, our studies will open new diagnostic and treatment avenues that are likely to improve the outcome in human patients suffering from Shh or Wnt signaling related diseases.